County officeholders will address issues raised by State Auditor
By Lisa Schlichtman
This week, the Missouri State Auditor's Office released its audit of Barry County, revealing a two-page list of concerns that county office-holders are now working to correct.
Under state law, the Missouri State Auditor is required to conduct audits of counties, like Barry, that do not have a county auditor. These audits are conducted every four years.
In auditing the financial statements of the county's various funds, auditors did not find any "material weaknesses" involving internal control over financial reporting. In essence, the county's overall finances and accounting were without major faults.
While the financial portion of the audit was clean, the state auditing team did uncover several concerns pertaining to additional areas of county operations and operations conducted by elected county officials.
These concerns were outlined in the 31-page "Management Advisory Report Section" of the audit, which also included the state auditors' recommendations to address the concerns and the county's official response to those concerns.
In the area of county expenditures, four main concerns were noted.
The first concern noted was that bids were not always solicited and reasons for not bidding were not always documented. In particular, the audit report noted the purchase of computer hardware for $12,002, the purchase of a computer voice stress analyzer for $12,200 and payment for repairs on the jail lock system in the amount of $7,954. State statute require bids for all purchases of $4,500 or more. Documentation for bids should include a listing of vendors from whom bids were requested, a copy of the bid proposal, a newspaper publi-cation notice when applicable, bids received and a summary of the basis and justifications for awarding the bid.
The Barry County Commission explained that the purchase of the jail lock system was an emergency purchase and both the lock system and the voice stress analyzer were sole source purchases. No documentation was in place to support these explanations.
The audit also revealed that logs of activity and patrol car usage for sheriff's deputies were not compared to fuel purchases. In addition, credit card receipts were not obtained from one of the three fuel vendors. As a result, fuel purchases, which totalled $58,000 in 2004 and $41,000 in 2003 were not always reconciled with credit card receipts prior to payment.
It was also noted that a check issued in February 2003 as a final payment for bridge construction services was $2,118 more than due, and the overpayment went undetected by the county until auditors brought the error to the attention of county officials.
A fourth concern under county expenditures was the untimely submittal of time sheets for sheriff's office employees. For example, the auditors discovered a payroll request from the sheriff's office for December 2004 that was accompanied by the employee's time sheet for the period of Aug. 28, 2004, to Sept. 26, 2004.
In response to these concerns, the county commis-sion stated their intention to solicit bids as required and also document in the commission minutes why bids were not obtained in the case of emergency purchases or purchases from sole source providers.
The sheriff said he would discuss with his deputies about improving documentation of fuel purchases and he would monitor these purchases in relation to activity logs. He also said his office would submit time sheets in a timely manner.
Other concerns pertaining to county operations that were noted in the audit are highlighted below:
- Some receipts and dis-bursements were not properly classified in the county's budgets, including federal and state grant proceeds and transfers between county funds.
- Published financial statements did not contain sufficient detail as required by state law. The various sources of receipts are not shown for all county funds as required. Additionally, disbursements by person or vendor are only shown for some of the county funds.
- Disbursements exceeded budgeted amounts in various funds in 2003 and 2004. Amendments to the budget must be made if there are valid reasons for disbursements to exceed budgeted amounts.
- County commission at meeting minutes did not always include sufficient detail of matters discussed or the reasons behind actions taken. For example, Commission meeting minutes dated July 8, 2004 recorded that a motion passed to purchase a lot behind the County Judicial Center. The minutes did not include the price of the land, the purpose of the purchase or the reason no appraisal was obtained.
- Minutes were not maintained for a closed session meeting of the County Commission on March 8, 2005. This meeting was held between the county commissioners and officials of the City of Monett regarding a 911 emergency services ballot issue.
- The county did not have adequate bond coverage for some elected officials. In particular, the county treasurer's bond coverage was insufficient to cover the school monies she received. The $550,000 bond secured for the county treasurer was approximately $1.2 million less than the amount required by state law.
- The county has not obtained a written agreement with the Shell Knob Senior Corporation regarding funds collected through the Neighborhood Improvement District, which was established by the Commission on March 22, 2001, for the purpose of financing construction of a water supply system for the Shell Knob Senior Center and adjacent development. Permanent financing for the project was obtained when general obligation bonds were issued in the amount of $178,000. The bonds are to be repaid from assessments charged to property owners. These payments are collected by the Shell Knob Senior Corporation. The county is liable for the annual bond payment, but no written contract is in place regarding collection and transfer of the funds to the county. The auditor did note that the county has not had problems receiving funds to make the bond payments but a written contract should be in place to monitor the financial transactions between the two entities.
- The county's records and procedures relating to general capital assets are not adequate. While the county has established a written procedure for the handling of general capital assets, adequate steps have not been taken to ensure compliance with the policy. In particular, auditors noted that no documentation was maintained to support that annual physical inventories had been conducted on all county-owned property and capital assets records do not always include complete information.
The County Commission responded to each of the noted concerns and pledged to comply with all state auditors' recommendations. A number of the concerns, such as adequate bond coverage for all county officials, have already been solved.
Reporting on the Barry County Audit will continue in next week's edition of the newspaper. The second article will focus on concerns noted in accounting controls and procedures handled by the Barry County Sheriff's Department.
Copies of the audit, which is identified as No. 2006-24, can be obtained by calling the State Auditor's Office at 573-751-4213, e-mailing the office at email@example.com. The document can also be viewed at www.auditor.mo.gov.